The Apple iPhone has become O2's most profitable phone and the mobile giant yesterday said the "unprecedented" popularity of the device would push its Scottish workforce past the 2000 mark by the end of the year.

The group, which is owned by Spain's Telefonica, employs around 1600 in Scotland - of which 1300 work at its contact centre at Skypark in Glasgow, where some 350 jobs have been created to deal with iPhone inquiries.

Apple announced in September that O2, the UK's largest mobile phone operator which also recently entered the competitive broadband market, would be the sole carrier in the UK for the touch-screen gadget, which combines the iPod music and video player with a web browser and phone.

Parent Telefonica described O2 as its "star performer", thanks to the iPhone effect. Ronan Dunne, O2's newly- appointed UK chief executive, yesterday declined to be specific about the impact of iPhone on the group's fourth-quarter profits and revenue, which were also unveiled yesterday. He did say, however, that the iphone had driven up data revenues with more of customers surfing the internet and sending emails.

He added: "I can tell you the iPhone has been a huge success. Customers are transferring something like 60 to 100 times more data on iPhones, compared with other handsets. Average revenue per user is significantly higher than traditional phone users. iPhone customers are high-value customers."

The group revealed a 7.8% rise in UK fourth-quarter revenue to £1.3m, with profits "roughly flat" against the same period last time.

Dunne also said: "Nearly half-a-million new customers joined us in the last quarter of 2007, 276,000 on contract tariffs, helped by sales of the iPhone, which has the fastest-selling device that we have ever had in the UK."

O2's latest new-customer figure was an increase of 63.8% over the same period in 2006.

However, it did not provide up-to-date sales figures for the iPhone - but in November the group said it had sold "tens of thousands" of iPhones in the first week and that it expected to sell "a couple of hundred thousand" over the Christmas trading period.

Asked if 02's growth plans in Scotland, Dunne said: "We've already trained around 350 employees in Glasgow for iPhone inquiries and to provide technical and operations advice. Most have come from the mobile and broadband parts of the operation, so we'll back-fill. Skypark has capacity for another 400 to 500 employees and we expect to be there over the next 12 to 18 months."

Meanwhile, earlier this week, O2 was warned that if it did not meet targets for the roll-out of its 3G network by June, it risked a potential £40m penalty and having its licence cut short by four months.

Ofcom said O2 was in breach of the Wireless Telegraphy Act, which committed the UK's five holders of 3G licences to make high-speed mobile services available to at least 80% of the population by the end of 2007, at which time O2 was some 5% shy of the target.

Dunne yesterday added: "During 2007, we were focused on the quality of our 3G services, not the quantity. However, we're currently at about 77%, and we are well within the time frame to hit at least 80% by the end of June."